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U.s. 13, Vermont 10, Feinstein 9, Us 8, Leahy 6, America 6, Boston 6, Texas 6, Mr. Rodriguez 5, Grassley 4, Arturo Rodriguez 4, Kennedy 3, Mccain 3, United Health 3, Washington 3, California 3, Medicare 2, Apple 2, United States 2, Cornyn 2,
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  CSPAN    Tonight From Washington    News/Business. News.  

    April 22, 2013
    8:30 - 11:00pm EDT  

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into opening up. an e-mail looks just about perfect but there's one little thing wrong with it. it's just enough to throw off a vigilant employee and if they actually open the e-mail and open the attachment they get a -- from the chief security information single back to training and if they forward that e-mail on to the security office as a suspect e-mail then they get a love note. and so it's that kind of ongoing, and it has to be ongoing because people forget. we are dealing with hundreds of thousands of e-mails a day and documents and phonecalls and we are just moving. it has to be continually ingrained in the standard procedure to become a habit. >> host: gentleman we only have about three minutes left. what kind of legislation if any would you like to see congress pass?
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>> guest: i think, talked about cispa earlier and i think if we can get rid of the barriers as pete mentioned that hamper information sharing between the government and the industry in providing liability protection to companies who do voluntarily disclose information , think that would go a long way. i think the government needs to continue to invest in research and development, basic research, the kind of research that companies develop. the government needs to do some basic research and deal with some of these big problems that are coming as a result of the positive effects of innovation but their negative effects as well. those are a couple of areas, to make sure that we clarify who is responsible for cybersecurity policy across the various industry sectors. >> guest: i would agree with everything that you just said and i would also add that meant them standards are very
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important. ensuring we have the right minimum standards in place. ensuring that government agencies that are being legislated focus on education as well as mitigating risk. >> host: and mr. -- >> guest: they controversial is mandatory regulations and we have already got them so we are not concerned about that aspect of it. information sharing is very important in the r&d is very important. liability protection i think is a very important provision to make sure companies can go feel free to share information and not worry about losses and things of that nature but the important thing is the executive order would be helpful in my opinion but don't wait for the legislation. sometimes it takes congress a long time to do things and we need to move forward without legislation. >> host: tom kuhn represents the edison eclectic institute
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and subtree is a presidency the presidency of the air traffic control system and greg rcf has several former titles and currently is an adviser to the financial system information sharing analysis center and represents the financial services. and gautham nagesh represents cq world call. thank you gentlemen. >> guest: thank you very much. nope. and will not be satisfied with calls for delays and impediments. i would say to my colleagues -- and i understand their views are heartfelt -- the chairman has a
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very open process toeview ways process a few -- ways to improve the bill offer an amendment when we start markup and made let's vote on it. i say that's a particularly those who are pointing to what's happened that terrible tragedy in boston as and i would saywo excuse for not doing the bill ol delaying it many months of the year. >> i never said that. said that. >> i never said you did, sir. >> mr. chairman i don't appreciate it.wh >> let me finish. we are goingve to have the moste open process on this. there will be debate in the committee. we will have time for it ill hav. -- senatorator grassley knows, i even offered some extra time on this. keep on. we will have the debate.
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i suspect we will have a lot of debate. >> i thank you. i was not intending -- those remarks were not aimed at anyone on the committee or the three witnesses. there were people out there, you read it in the newspapers, who said it. what i am saying is, if there are things that come up as a result of what happened in boston that require improvement, let's add that to the bill. because certainly our bill tightens up things in a way that would make a boston less likely. changes in the exit-entry sent -- the system of visas, requiring the 11 million people here to register. all of that make it a tighter bill. maybe it should be made tighter still. we are open to that. that is all i am saying. i heard lots of calls on people out in the country saying delay it. what our bill does, very simply, is add billions of additional dollars toward border security and border fencing, tracking
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immigrants who overstay their visas so they can be apprehended, and reforming our immigration ports to expedite asked -- deportation of dangerous individuals. individuals currently here will have to register with the government, give photos and fingerprints. although of that would make america a safer place. that is what i am saying here. so, the status quo has none of these things. therefore, no responsible person should be aiming to keep the status quo in order. let's move forward. let's have this debate. it is an open debate. let's discuss all amendments from all points of view,
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>> one of the problems when the judges are pointing public defenders is that public defenders job is reliant on their approval and judges are judged on their efficiency. how fast to the do they process cases?
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how quickly do they get to the docket? so they are going to want to have a public defender that goes along and gets along that does their bidding. that is a real challenge and in new orleans for a long time the system was also had one public defender was assigned to one courtroom and the same judge said they were always arguing for the same judge. the problem with that is that they were then kind of trading clients in a way like okay my private paying client you know he will take his case to trial and is inclined to plead guilty. there was the sort of trade-off going like cash in your favors only on some of your clients and it really made for a very corrupt system down there.
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>> now a brookings institution form on making medicare or efficient and less costly. this is an hour and a half. >> good afternoon one and all. i am bill galston a senior fellow at government studies here at working since a two shin and i would like to begin by welcoming everyone, including our c-span audience to this discussion of options for reforming the medicare system. the importance and timeliness of this topic should be clear to everyone. medicare is a big piece of the health care sector which now constitutes more than one sixth of the american economy. it's a cornerstone of security for tens of millions of americans. the growth of this program which will only accelerate as more and
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more baby boomers retire as a prime driver of our long-term fiscal challenges. there is a wide debate as to whether this lower rate of growth in recent years means we have finally turned the corner or rather will begin to accelerate again as we continue to recover from the great recession. to explore these issues and possible responses to them, we have, i'm delighted to say, assembled an all-star cast. their full biographies are available at this event and also on line so i will just hit the high points in order of their initial presentations. robert reischauer to my immediate left is president of american institute and a former director of the congressional budget office and served as a public trustee of the social security and medicare trust fund. to his left is james capretta a
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former associate director for heart home health care social security education welfare program at the office of management and budget is now a senior fellow at at the public policy center. to his left, christopher jennings formerly senior health care adviser to president clinton. he was now president of jennings policy strategies and has recently served as a senior adviser to the bipartisan policy center's comprehensive reform of the u.s. health care system. to his left, joseph antos the welsh and age taylor scholar in health care and retirement policy at the american enterprise institute. has served as assistant director for health and her health and human resources and maryland cost review commission. finally rhonda randall of board-certified physician in family practice as well as hospice and palliative medicine serves as the chief medical
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officer of united health care medicare and retirement. each panelist will have 10 minutes for an opening presentation. a timekeeper in the front row will flash to cards, two-minute warning and then your time is up assuming compliance by all speakers we will then have a few minutes for discussion among the panelists before moving on to audience questions. three final preliminary points. first and this includes the panelists, please turn off for me at any electronic devices that could interrupt the proceedings. second, for the young and young of heart among you ,-com,-com ma you can follow this event on twitter, hashtag medicare. third, concerned about the future of the medicare is widely shared not only in the country but also within the four walls
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of the brookings institution. i am happy to be able to spread the news that next monday the engelberg center for health care reform will release a comprehensive report created through broad consensus and provides the framework for aligning health care quality and finance reform to medicare as well as medicaid and private health insurance. this work is a continuation of bending the cost curve series. please check the web site next week for a full report. without any further ado -- >> thank you bill. i've been asked to set the stage for saying a few words about the fiscal challenge posed by medicare and after that i would like to make for general observations and the context for the remarks their marks of my fellow panelists. medicare has been and will be in the future a major source of the growth of federal spending.
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the underlying reason for this is that health spending in both the public and private sectors has been growing and is expected to grow in the future faster than either income or the economy. cbo has estimated that the growth from outlays for medicare over the next decade will be about 22%. that is 22% of the total growth of outlays in the federal government will be accounted for by medicare. this is a period in which largely because of the affordable care act and the health reform act or beneficiary medical spending is expected to grow at historically low rates. only 3% a year which is roughly the speed at which we expect the per-capita economy to grow. a contradiction between historically the world growth
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and beneficiary spending and a rapid growth in overall spending explains the fact that with the baby boom generation reaching age 65 and a number of beneficiaries is continuing to grow very rapidly. from the 1980s through the middle of the last decade, medicare enrollment grew by less than 2% a year for big chunks of that period grew at 1.5%. for the next decade it's expected to grow at 3% or slightly above 3% a year because medicare spending grows along with health care costs which historically have grown faster in terms of economy. medicare spending is expected to grow more rapidly -- rapidly even after the baby boom is safely tucked into their
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retirement where enrollment will plummet, less than 1% a year after 2035. as a result of growth that is projected in the future medicare spending is going to surpass social security spending by the middle of this century. because of the way medicare is financed we can't -- medicare spending increases. the hospital insurance program of medicare which amounts to half of medicare spending is financed much like social security. all workers pay payroll taxes into a trust fund. all employers pay the same payroll tax into that trust fund and out of that trust fund comes all of the spending or part a services primarily hospital insurance spending. the age i trust funds has exceeded revenue since 2007 and
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what that means it is the balance of the trust fund and the assets of the trust fund have been declining and they will be totally completed sometime in the middle of the next decade. since the trust fund can't borrow if the laws are changed medicare will be unable to pay full payments for charges in the age i trust fund. it will only be able to reimburse providers 85% of what they are charging. so clearly legislative action has to be made before that he either to raise taxes or slow the growth in spending or preferably a little bit of both. i my reckoning i have completed my assignment and rather than take a gold star as i said i want to have a couple of general observations. the first when we have
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discussiodiscussio ends like this we should make clear what our goal this. if our goal is to moderate the growth of medicare costs what cost are we talking about quicksilver talking about the federal government scots? are we talking about the federal government and beneficiaries cost or are we talking about federal government scots in the beneficiaries cost and the cost borne by states localities and private payers? in other words, when we talk about medicare for former cost savings you can reduce medicare programs federal costs but at the same time increase the burden on beneficiaries or increase the burden on states localities in private-sector payers and in fact push up national health care senators. my second observation is in our discussions we should clearly distinguish between reform and traditional cost or state measures. true reforms changes the structure of a system where the fundamental behaviors of
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suppliers and medical researchers and beneficiaries. it's unlikely we are going to generate huge amounts of savings over the next decade from shure reform. true reforms require an institutional evolution behavioral adaptation and changes that are best introduced gradually. many of the suggestions have been put forward through the growth of medicare costs are not true reforms but rather a traditional cost saver. they can generate quick savers but those savings can sustain over the long-haul and may compromise quality. my third observation is that we are unlikely to succeed in reforming medicare without reforming the broader health care system. this is because medicare beneficiaries receive their care through mainstream providers who practice one form of care and delivery system that serves both
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their medicaid and medicare and the uninsured. finally, i want to say that many forms that are being discussed might do more to improve quality and to reduce costs. while the current system is markedly inefficient through duplication unnecessary procedures and even fraud there is also a lot of insatiable desire among the public for the latest and best innovations in the continued development of new devices, new procedures and equipment and all of that cost a whole lot of money. >> thank you bob for that exemplary stage setting, exemplary in all respects. >> it's well under budget to match. thank you for inviting me to be a part of this discussion today. it's quite an important topic.
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i participated with my colleague joe antos on the dais here in a project that he helped organize that provided and produced three papers released last week by the american enterprise institute. joe will be speaking about one of them and i will speak about the findings from the study i did from colleagues from the university of de soto roger feldman ryan dowd as well as robert. all those papers are available on the web site and they are all related to today's topic, medicare reform and its future. my topic is the examination of medicare for all and the broader health system and specifically picking up a little bit on comments made i want to talk a little bit about my view of how medicare fee-for-service has broadly influenced the organization of american health
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care. in my judgment medicare fee-for-service is the 800-pound gorilla and unless it gets reform from the broader system won't move in the direction we would like to see it move. to begin i would like to start with this medical order that bob alluded to. i would put it in slightly different terms. i think the prevailing view is that the health care system is something like a runaway train heading down the tracks with a very accelerated rate and medicare is sort of one car attached is very rapid runaway train. therefore to slow down medicare you have to slow down the whole train. otherwise you're picking out one portion of it and increasing equities. it probably wouldn't work if you just focus on one part of it etc.. i'd like to take exception to that metaphor and say well, what if medicare wasn't just one car attached to this train but it was actually the engine at the front of the train pulling the
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rest of the cars down the track or if not the only engine at least one of the primary engines? if one thinks of medicare in that context then you say wait a second maybe we need to focus a little bit on medicare and its role in american health care first and foremost. that is actually one of the points of my paper. to begin, medicare is the largest single-payer in american health care. in any given community the combined buying power of various employers in the marketplace might exceed the value of medicare's purchasing power but they are dispersed and they don't act as one. medicare is a single predatory structure so it's it is the single largest factor in any given marketplace. if you look at the national health expenditure data medicare is roughly a little bit more than one out of $5 of personal health spending so i think that understates medicare's role quite substantially. first of all even in the
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accounting private health spending that wraps around medicare compounded and private insurance and not public insurance. example medigap plan and employer wrap around plan don't don't -- is accounted as private spending. if you pull back from that and actually look at the national health expenditures by age roughly one out of $3 is for population age 65 and older. that is quite substantial and then medicare's influence goes beyond that to the disabled on the medicare program as well. if you put those dollars and they are getting close to four out of $10. furthermore medicare's really tory payment structure is widely used by the broader system. in part due to the recognition that the delivery system becomes accustomed to it and other private payers piggyback on it so if you look at private insurance of all the insurance out there three out of four of
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them and at least one of their main plans offer a plan banking on medicare fee schedules. that doesn't mean he is every dollar amount that medicare uses but they use the structure and the add-on to it or adjust it to some degree. of course medicare crj system for paying inpatient hospital services is widely used by every payer pretty much in the country. if medicare makes a change the whole system changes in response to that. medicare's influence is obviously the biggest player. now, the next point to make is that medicare is a fee-for-service program by and large. three out of four beneficiaries of the program are into these of the system and it was designed in 1955 the prevailing insurance of that era. fee-for-service insurance is essentially a claims paying operation. that is a licensed medical
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professional submits a valid insurance claim on behalf of the service provider rendered to a patient. the insurer in this kind of an insurance system is in a sense obligated to pay the claim their aim legitimate medical service. medicare has essentially operated that way and still essentially operate that way today. now there are some exceptions on the margin but by and large it's a claims paying operation that they're trying to move away from but really very slowly and very modestly. the only way this kind of insurance plan ever really works is if you have patient cost-sharing at the point of service. if you have a system where the insurers pay any claim filed by any provider that is licensed and legitimate the only way to have a check on fees for services that the beneficiary pays the portion of the cost at the point of service so they
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think is this a legitimate thing that i really need and the patient has some responsibility and therefore there's a little bit of a check on saying let's just not use everything. let's think about this twice before we do so. in medicare however patient caught sharing is quite large in the statute. there is an an inpatient deductible and an impatient coinsurance rate and limits on the number of days you can stay in the hospital. there is positioning co-payment deductible. all of that is largely rendered useless because of wrap around insurance at the vast majority of beneficiaries participating in medicare fee-for-service have either medigap supplemental insurance, 25% or they have an employer wrap around plan, about 40% or they have medicaid, roughly about 20%. if you put it all together essentially and they're a couple of others, about nine out of 10 fee-for-service beneficiaries pay zero or near zero at the point of service for the health care costs. so you have a fee-for-service
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insurance system where the beneficiary population is not sensitive i am large of the point of service and it's very predictable what will happen which is they are our huge volume increases in medicare and there have been for a very long time. it goes into the study looking at physician services through 1997 and 2005. it shows that overall there was an actual real cut in per service payments from the medicare physician community of 5% which is pretty remarkable. they pay physicians less in real terms in 2005 than they did in 1997 but overall patient services cost went up by 35% and the reason was volume and intensity of physician use, physician service use went up by 40% during that eight year period. pretty remarkable actually because then you dig into the data and you say essentially what it implies is the beneficiary refusing and needed
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40% more services for their care eight years later. that is a very unlikely occurrence of their are lots of volumes in the medicare program. a third would be that when you look at medicare and its influence you can see the inverse of the eye looking at when there is large penetration from the medicare advantage program especially the hmo program. several studies were done in the recent ones by michael chernoff and others indicates indicate that when you have large medicare advantage penetration in the medicare marketplace it turns out the thief for service costs actually go down. not just medicare advantage costs and that is because medicare advantage in the hmo part of medicare advantage does have some incentive to change the practice of care by the physician community. there've been several studies
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that show that has spilled over and that influences how fee-for-service those same physicians take care of their fee-for-service beneficiary population. i think that's another window into medicare fee-for-service his role and how it influences the delivery of health care. ..
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>> all the leaders felt very strongly our work had to be grounded on improving the value that our return on investment in this country was not defendable and most important we are not serving well the patients to enter our health care system. lead believe the four pronged a set of integrated policy that included reforms of medicare tax exclusion policy prevention and wellness, a state based
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reforms dealing with medicaid and medical liability challenges. suffice it to say i will not go through all that and i have been asked to focus on medicare reforms. to anyone who has an old father or mother more has experienced health care system for themselves or their children will know the frustration of navigating through the health care system. it is complicated and uncoordinated. for that there can be no doubt. positions and other health care professionals responding to the flawed incentives predominantly in the fee-for-service system are penalized for spending more time with patients and reported for getting an unnecessary and dangerous procedures. penalties frustration will -- translate into better
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care and they have directed us that rapacious focused and practitioner in powering. federal and private-sector savings would be a desirable outgrowth but not to be the driver of our work. by the way i should just say if you take on the health care reform issue if you focus on any other approach you will not be pursuing the policies or viable approaches. so whether embracing one-off policy proposals with the case but case basis we constructed a vision that would have a meaningful impact on how we deliver care. we're very focused in that context that has really just shifted costs to other purchasers.
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recognizing that conservatives with traditional medicare and major concerns with premium support policies we tried and believed to find an approach from the most valuable component of both. we except the current fee-for-service program is flawed for the obvious reason little correlation to quality and value in most were concerned about shifting insurance risk and possibly cost to beneficiaries within the context of most premium support proposals. so our policy envisions the traditional medicare program the medicare a vantage to encourage competition and choice and it that is designed to improve care and
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quality. how to reduce this? first, our approach embraces a number of policies that experts have advocated a way to transition away from the traditional fee-for-service program. so we do support bundling reforms and service reforms as a significant but short-term down payment to help transition to a more coordinated system. similarly, we do embrace the income related premium that we believe does improve upon the administration that was just unveiled the the president's budget. we make certain the subsidies never declines below 20% and it goes below 10% and we are concerned about having selection issues.
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in this context we embrace a and improved low income subsidy program dealing with the purchase of prescription drugs and with this population may have a lot of older below in, medicare beneficiaries who are underutilizing low-cost generic drugs. so we designed a cost sharing mechanism that eliminates cost sharing for the use of generic or other low-cost products and recapped the federal reimbursement rates to providers of those drugs to ensure we get the significant uptake in the use of those products. the consequences we get over $40 billion in savings over 10 years. now restricted and improved it the benefit by bringing it to the charge differs century. but this addresses something
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that we just heard with the means to modernize the benefit. so with new catastrophic coverage benefit and we all know we don't have catastrophic coverage with the traditional medicare program and redo so with the budget neutral double by combining the deductibles anb to have the one deductible of $500. the catastrophic cap is capped a little over $5,300. that is budget neutral. that is not so new to the other policies that what is is we have a and the elimination of physician services applying to that deductible. physician services you have to pay the copayment but deductible does not apply which addresses a real concern. oh my gosh. i have two minutes left.
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we have a bunch of things we won't talk about. [laughter] third, and most significantly we alter the incentives of the medicare program i hope we have more time to talk about this. with accelerate the movement towards and we address the shortcomings. one of the shortcomings is medicare beneficiaries just attributed to the program and there is a two sided risk the policy is designed to excel the removed into the medicare networks to reform but reid do with the managed program. how to redo this? of that and a side rehab of a competitive bid to be linked for the fee-for-service program and on the medicare network side
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in order to facilitate medicare beneficiaries of moving from the fee-for-service to the medicare networks we do fries payment rates for all fee-for-service providers and then we provide the updates if they go into the network. said he will be frozen at sgr levels for a physician and hospitals and others you will be paid but the pay rates will be frozen to have financial incentives to deliver the programs. we can talk about the implications later rethink it is an important innovation. says i have no time left when we just aggregate what this does with savings and hopefully we can open for questions. we do believe the combination of the incentives will improve care and focus on quality. the aggregation is about
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$300 billion of net medicare savings includes the income protection and mentioned as well as we for being the sgr. net $300 billion of significant contribution that much more importantly, a significantly enhanced and improved health care delivery system working to the benefit of the beneficiaries. of a to talk more about that but my time is up. thank you. >> thank you so much. i suspect you'll have a few more bites of this sample before it is over. joe? >> the overall title of our papers that a.e.i. i just happen to notice is preserving medicare for future generation
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market-based approach for reform. the preserving medicare does not keeping it unchanged. preserve medicare, change is inevitable comment be better if it was a conscious change that we wanted to do rather than something that happened. the critical element is to reform the program in a way to change the incentives that face both consumers, patients, and health care providers. bob happened to mention the insatiable desire of patients with new medical treatments there is a lot of truth in that. i think a good question is where can consumers effectively exercise there judgment ideally?
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where is the best place for consumer action to fall? and i say in spite of the availability of my favorite -- a favorite medical advisor come in the internet , probably by a doctor has an advantage over me to discuss treatments that i might or might not get. identify something great the looks terrific but it could be completely wrong. ideally my doctorate tell me that is not a good idea. where consumers can make a decision is with regard to the choice of the house plan. if you have good information it is possible to choose a good play and over a worse place and for your personal circumstances that also look at what is facing my physician. he needs an incentive to not only give me good medical of
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vice but have some awareness and concern about the overall cost of might care. in other words, he will be there making a lot of decisions i will not have direct control over that will influence not only my care but to cost me and everybody else. that is true with the private health sector and medicare as well. medicare is critical to the well-being of 50 million seniors today and critical to the well-being of more people in the coming year. i think the question for me is if we go in the direction and as chris and mentioned in the abbreviated fashion in the end -- and to the move to better competition?
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>> and how far can we move in that direction to do partial measures? i argue the partial measures with the proposal really will not be effective. so full competition in, what does that mean? it has become a bad term i will slip into that terminology. but the kind of competitive reform i talk about goes beyond the simple idea of competing health plan also the changing the traditional program operates and there is some similarity between what i would recommend. but the key element with the
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effective competition. in fact, what we now have the competition that involves to does not involve the traditional medicare program. there private plan for quite a few years now set above fee-for-service medicare and not surprisingly he did pretty close generally what the government promised they would get paid. if the date is set up if the government tells you, the competitor what it is willing to pay, this might influence your bid.
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probably you will not get the lowest possible or the strong dissents for e efficiency and that is precisely what has happened over the years with the medicare a vantage program with traditional medicare. so the idea behind the full competitive model is to have all the plans included reform traditional medicare. the idea behind the bidding is to reverse the flow of information from the way it is now where the government tells the plans what it will pay and instead have the plan still would government what they think it will cost to produce a benefit. some people want to believe premium support gives people
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vouchers and since your grandmother out into the very difficult health insurance market without any protection. that is neither reasonable reform and those proposals would comport with what i am about to suggest which is instead the bit is on the basis of the fold medicare benefit, whenever that turns out to be zero or enhanced benefit, but they would be on the basis of the same benefit. the private plans could enhance that benefit if they wanted. it would be the cost of their bid on the basis of the basic medicare benefit. that is one protection. obviously medicare program currently and in the future would certify the plans and
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basically would provide that protection to seniors to be certain that the plans they are considering are not only legitimate plans but had followed through access to the services that are guaranteed under the medicare law. so it is not quite sending elderly relatives out there to defend themselves. it is in the spirit of markets that have a reasonable degree of regulation. from there i guess the question is, will it work? the current system obviously fee-for-service, an unlimited subsidy to the health sector i'd like to emphasize when you think about it that the average medicare beneficiary
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incentivizes the health plan or the provider directly. the subsidy is to the health sector. if you don't change the terms of that subsidy you will not get the changes of the way it operates. but as jim said if you change medicare you're likely to have ripple effects that could be very positive for the rest of the health sector. the question is, can you get
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>> of course, that does say
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that it is not a fortune teller or an accurate one in the projections are faulty but in fact, the program has then better with per-capita prescription drug spending than the rest of the country. that is a good indication. and two seniors make a choice is? this is a fear everyone has. so here i go to part d again. what a lot of analysts who don't like the idea have said is i
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. >> is an exciting time. population reasserting is growing at a tremendous pace as baby boomers aged to there golden years we're at an important evolution. these leading-edge consumers and represent the beginning of the epic wave of growth has statistics were mentioned at the end of the decade, a 64 million people will be enrolled in medicare. 40 million more or 28% more than today. and also the population will look differently as the boomers age because of there unique qualities and characteristics. we expect them to interact with the health care system differently than their generations did but for companies like mine this is
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a dual challenge and an opportunity. not only to serve a much larger population but to tailor our plans to survey unique needs of the growing at a beneficiary. so what we have learned so far to look to their characteristics, they're very interested to manage there health and making the number one choice for their medicare plan. emphasize consumer choice because that is what boomers are all about. we don't expect them to change buying habits because they are 65. at the core boomer's our shoppers. the dynamics of their use and working years put them in the sophisticated buyer so rather than sticking with tried and true there were likely to switch products if they don't find one that fits there needs. this level of sophistication in their shopping habits spills over to health care. we fully expect them to use
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those habits to choose benefits. they will have high expectations for personalize health care a one-size-fits-all approach is unlikely to satisfy. at united health group we spent the last several years preparing our medicare organization with a shift in we already see the change. we have 1.2 million boomers birth dates 1946 the 48 enrolled in our medical care products. the majority of our experience lies with the employer individual business within the work force purchasing health care as an individual or through their employer. younker medicare eligible are demanding more customization and accessed through information that gives them more control over their own health care. we fully expect this is just the beginning of a broader trend. boomers will demand more from their health care program. the benefit tear will not hesitate to disenroll if the
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plan does not meet their needs so it has a positive impact to drive to competition and innovation. we're well positioned in ready for that shift in health care. we also know boomers are expected to live on there that if parents and studies show they will. to do so they will have to actively manage their own health. this exhortation of living longer runs contrary to boomers most of whom who will have at least one chronic condition as they age. my second point* they will challenge the health care system not just because of their numbers that because of the struggles they will face as they live longer than generations before them. the health care conditions will be more extended and complex than those experienced by previous generations of your 65 for older today you're more likely than not to have at least one chronic condition for the two-thirds of adults
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fall in the script and three-quarters over the age of 80 fall into the group of more than two chronic conditions. the reality is it is the biggest driver of health care costs and decrease quality of life. the size of the overpopulation only intensifies the pressure to identify new approaches to ease the effects of the associated cost we also know the largest writer is lifestyle choices sedentary lifestyle, obesity, smoking lifestyle, obesity, smoking, leads to conditions like heart disease, cancer diabetes and others. and it is a key component. it is an incredible opportunity to leave all for seniors to accept a higher quality care than they are able to do today. we look for to partner with the federal government to
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bring about that innovation. medicare advantage has a strong record of pioneering new innovation and strategies for improving health care quality with evidence based health care system. the model of care called ever care is with the special needs plans today this was a program invented by to nurse practitioners working in a nursing home to find the quality of care and out comes at the patients were receiving was suboptimal and they knew they could take care of individuals who were typically shipped out to the hospitals if they treated them in place with the qualifications they had in the nursing home. that model was a permanent part with the special needs plan and shows primary care can save cost. the same holds true for
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members with diabetes more effective management there was a study published that demonstrated individuals who had diabetes when seeing in their home with a nurse practitioner who did the estimate with getting the care started with full examination and medical health, social history and behavioral health increase primary-care significantly and for readmission was the crest -- decrease. for modernizing their broader program to meet the health care needs of future generations. we look at this says to sides of the same point* consumer choice and sophistication but the other side is the unavoidable truth that cost related to
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chronic conditions have a significant impact on medicare advantage programs that viable way to achieve sustained ability is to improve health care quality to engage in consumers to be more active in their own care. people with diverse backgrounds are gathered in this room right now if you look around the room sitting next to has a very different job than you do that will take all of us all sectors of society to work together constructively if we will innovate the solution is necessary to serve as we age we believe the private sector plays in a central role of this equation and we have the data that illustrates success to help improve health and partnership with the federal government and health care professionals, we're chance for me the way health care is transformed. we are excited about the responsibilities to change
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health care in this country. on behalf of united health care, thank you. >> let me take this opportunity to thank the panelist for there concise and will focus presentations. here at brookings despite the different disciplinary backgrounds and orientations on policy matters, there is one belief you might even call it the article of faith that unites us with a common mission that is call it jeffersonian naivete that democracy does not work well unless and and tell the people themselves understand the real choices they confront us citizens and we confront as a country. i believe what you heard
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constitutes a superb introduction to one of the most important policy problems. i will struggle to be a moderate moderator. i have all sorts of questions and i would like to put to the panel this but i know they have questions they would like to put to each other. so i will suppress my question to issue the invitation and please me brief and pointed. if you have heard an important proposition put on the table over the past hour would you state that
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proposition? who put it on the table and why do you disagree? >>. [laughter] everybody agrees? i have a list. who wants to start? >> rampant consensus. [laughter] >> i am not so sure. i am in mumbai partisan mood so i have to be somewhat constructive. one area i am not sure i disagree but i do think one of the challenges with the m&a policies notwithstanding the innovative approach to
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manage costs they have been shifted the savings to the program in any significant way in fact, it has decrease costs notably to the medicare program. one area that i believe is important do talk about modernizing the medicare program is to ensure medicare beneficiaries feel they have a choice of where the one to go in there comfortable and do not feel substantial disruption. if we went to the at some premium support we would have major problems with cost and lost chances to achieve savings. our model which i hope we can talk to a leader is an attempt to take advantage of both of those to address the shortcomings and premium support only model would
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create that deception to not guarantee will apply to see in the program and also shift the significant cost risk but the hope is we could find a balanced approach i will underscore if we went to the fee-for-service approach it would drive up costs with the problem on a the payment side but the initiatives that we lay on the table a chance to do that. to exist as redo. -- we do sit back what i was talking about was not people who like the slogan characterized that as it tried to make clear the medicare program will still
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be medicare subsidies the government still has a responsibility to ensure the plan operates in the appropriate manner to take action in the few cases that might not have been but to shift the cost to the government the medicare advantage program is a conscious political decision and back in 1997 with a cost-cutting move to severely cut payments to private plans in medicare and half of the plans dropped out within three or four years. in 2003 republican congress in passing the modernization act they build in this guaranteed payment that was at least as high as
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traditional medicare. that is not what a sensible process says that is basically the top down approach that tells a plan here is how much money we are willing to offer. more than you thought before. indeed, it worked from the standpoint of increasing the number of plans available but it didn't balance appropriately government cost, the options for beneficiaries they tended to get a much better deal and the extra benefit to have lower-cost debt the third-party was overland. >> first of all, i think bob
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was certainly on to something when he uttered the phrase rivet consensus because there is a very important analytical point* shared across the panel that the fee-for-service model of medical pavement is a very sad optimal way to think about health care delivery. that is important. most with there political policy prior but the question i want to put on the table that appeared to me between bob and janice is
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as part of the overall health care system, who is in the driver's seat? gm said medicare understood correctly is the engine for a lot of the features of the health care system that we don't like it this point* where it could not afford and he said bob had a different analytical take with the overall health care system. it sounds to me as if you deserve a chance to respond. >> i hope jim will disagree but i think it is a two-way street. the private sector can get hung up on which impact is larger. what we want to focus on is the three dimensions of the
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importance. one is cost, was the second is quality of care, the third is innovative ability and a fee-for-service i think when it loses on cost of quality because it is difficult to enter great care and managed care. when we have lots of little different providers fettered not conducive lee operating and coordinating care. it is great for innovation. we basically have an old bin spigot. to claim it improves care it
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will then get approved and even if it improves care marginally for some of the people, we will pay for it to. but 1,000 flowers bloom and a few of them are pretty and one worry is under a premium support system i confess of the phase with right lee dunn premium support and i share the same criticism that chris has there might be a problem with the amount of innovation that takes place because even in the competitive world entities that are larger than compete with each other try to mirror each other's behavior as opposed to go off on a new tangent because that is
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a high risk with a lot at stake. there are no right or wrong answer but with the three attributes how you want this system to reform. even with the staunchest defenders defend and believe the changes are needed that will the improved quality of overtime. >> would you like to respond? then we go to question. >> i agree with what bob said. the reason i brought up the metaphor is to make a point* said it has shifted there was a prevailing view some would say we need to fix medicare because it buys
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from the larger system we need cost-containment. there is this very important point* medicare is a big part of the reason why it is what it is. there is more recognition of this now than in the past. one settle saying why one might think the difference that joe put forward and chris put forward, i think it is a question of how one views the likely success of the current political economy. medicare looks the way it does for a reason. it likes go away at medicare fee-for-service operates and the question is how can i break that cycle with the
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familiarity level with a bipartisan policy center. but the cms and the federal government managing the transition to of an effective delivery system and chose approach relies more on the system with a government cannot mess it up. the consumers will select the highest i.q. delivery system is properly consented to do so. >> you got my juices flowing. i am sorry. you can of it -- overemphasize of the health care sector because there is nothing like medicare. as you say 1965 did resemble to insurance but it doesn't now. there is nobody with the
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employer sponsored health insurance world in the individual purchased who was on the unmanaged fever -- peter service system. everybody is networking and intervening to steer or manage and to administer prices is the 800-pound gorilla this is the price. ticket for the visit he don't get any of our business. within a provider except the t. providers to face up to. medicare has tremendous political advantage that it gives consumers the most choice anyone could have
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when you have the most choice anyone could have you cannot be unhappy are criticized for but the decisions to make that resulted for quality often are your responsibility. not united health or the play and. siegel tear it is the government's fault with the managed competition is the plant's faults. we are hesitant i think to move in that direction, but this is changing generation the early. we have a preponderance of elderly jews still remember the old lacrosse system to go anywhere with no management to younger generations are in place and with networks with huge penalties where they have
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restrictions on exactly what is covered is it 30 group sessions of there be or 15 individual sessions? we are used to that but i will keep going until i wear out. [laughter] i was in a situation i cannot name names but individuals who work with people who have a problem then go into the emergency room of one hospital and they said they cannot find anything wrong with you was still hurt the next day went to a different hospital and the same thing. the third hospital the third night so three nights in the hospital medicare pays for each one it turned out to be the mexican dinner he eight fortnights ago. [laughter] no system would tolerate that.
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[laughter] >> on this delightful disquieting note. [laughter] i would like to do turgid over to our patient audience. just a word about the procedure from here. raise your hands to be recognized way until a microphone of rise. please identify yourself if you have institutional affiliation to put on the table and ask a short question and identify to whom the question is addressed. the floor is yours. >> i am dr. caroline you
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know, me pretty well. you have talked about cost in the system even mr. reischauer if it is the same as prize in a competitive market price and cost is close and with primary care is one. and there are shortages because the competition is so stiff. but the article about one month ago in time show there were huge profits in other areas and if you reduce volume what you are giving to providers is more money for services you could reduce costs by reducing price that is the approach they taking in europe with a lot less expenses per capita health care with results as good or better than ours. think of that.
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[laughter] >> whoever would like to respond? >> here is a start. i will confine myself to i will confine myself to medicare but the problem medicare has had all along they cannot find out what the price is. medicare fee-for-service intends to micromanage and literally tens of thousands of codes. i would argue it is impossible to get it right. the thing about price setting i have a former red rage regulators so i do stick -- speak with experience with price setting only find out from those you pay if they think the price is to go. you never find out if they think it is too high.
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that is what you need competitiveness. >> in our experience you see when price comes down, volume goes up. in my experience not so much about controlling the price but changing of methodology to blind the incentive so the paper and health care professional and the individual had of incentives around there goals of care. so if you have an individual approaching end of life in the goal of care is to maintain functional status to remain independent as long as possible but if what they get is a significant amount of technology that is in a restrictive setting that may be contrary to their goal to have that discussion so that aligned
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the second is around transparency you mentioned it very nicely around because everyone is clear on what that cost is. the consumer and health care professionals it is common to have discussions with the primary care physicians in our network who ordered medication setter on the formulary that had no idea how much that drug costs before the wrote the prescription than the patient came back and complains. the transparency around that is important and the methodology and payment mechanism with the desired outcome not just the process >> with respect to comparisons internationally there is great diversity around the world but also cross-country's but there is one uniform rule that in systems that rely on a price setting system to keep their costs under control, the
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effectiveness it is very predictable -- predictable it is a flight control and reduces the supply of very expensive care to some degree and that is the way it works and that is the intent of the way. by and large that is not detrimental with primary care that is relatively expensive than they can supply that too much good degree from direct subsidization and it is convenient for a large portion of the population. the problem comes with a capital intensive purchases where you need trained personnel to perform very rare or import and procedures on patients. they tend to under invest that is also with the data
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that compares internationally. >> ideally when you have prices you would like those before the outcome and the quality. and bought for inputs particular they. both outcomes of quality are different local measured, number one. number two, there isn't a direct line between c employ it and the quality of the help put. and might work for him but not for her and will work some what for him. what you need to do is have a large group to treat average quality, average outcome first is price. it is hard to do when you have of the delivery system
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of the mom and pop organizations as opposed to the supermarket. this is a challenge and we try to move in that direction. but it will not be fast or easy. >> actually, i feel compelled to abandon my moderation -- moderator's moderation just to add to the question on the floor, last year i read a mckinsey study that compared salaries of the health care profession around the world and one of the things that you noticed is salaries almost up and down with u.s. medical profession are substantially higher than they are is in europe and presumably this is baked
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into the prices of these services being delivered. how does that come about? to recap what we pay for? >>. [laughter] it came in part because of the constrained budget for health care services. and people demanding services are not aware of the price of the cost. when you go out to buy a loaf of bread you know, if you buy the bread you cannot buy it that pork chop. you don't have enough money to buy both. we by health care through insurance provided in large measure of the under 65 and to pay for that their share
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of insurance with a reduction of wage income. compensation is the same bet more is devoted to the french benefits and we go to the doctor and for all practical purposes it is close to free. the $20 copiague not the $90 office visit. . .
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the employer didn't want to tick off the employees by saying, we've decided you have to go to holy cross hospital. you can't go to georgetown or george washington oar some of the more expensive hospitals. that's the situation we're in. >> i'm just -- wanted to say the whole question of this -- spurred on a whole conversation and we could have a whole panel but i do believe that cost is price and use and the underlying how much you're paying for it. the price is the salaries imbedded in that. there's no question we spend way too much money on health care and relative to what we get back in return for it. so the question is, how do you
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squeeze out, without undermining quality and access in health care? i have a feeling in this country we'll always spend more than any other country. the question is, how much lessen we spend while still getting a better return on the investment? and these new models are being constructed to try to squeeze out some of that. there's no question that deeper service doesn't -- it's much better on the pricing but it's terrible on the use. that's just -- the utilization ensivetives. so how can we focus on that as well, and if we are always going to say it has to be fee for service or fee for competition, we're going to lose out, how to get an enhanced healthcare system, and if i may just say, on this policy proposal, the difference really on these
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medicare networks is that they all provide a -- they will learn how to allocate their resources more efficiently to improve outcomes. it's going to be far more coordinated. it's going to be -- we're going to for the first time have two-sided risk. we're going to have shared savings, far better than what we are seeing in the current acl models. so, at the end of the day, if we don't find some amalgamation of the best of both systems, we're going to continue to do what we do today, which is uncertain, un -- almost always higher healthcare costs, and no one can say that our current system is working. it's working now, i would say that we do have a temporary pause on healthcare costs, but how -- healthcare cost growth in
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this country, medicare is doing better than anyone. no question. but it is true that no one is also saying, -- i will say maybe 90% of the health economists in this country will say it cannot be sustained in the absence of more delivery reform changes, and -- delivery and financing reform. >> now back to hour regularly scheduled program. the woman at the end of the aisle. >> thank you. i am a licensed clinical psychotherapist, and i remember at a undergrad school at the university of maryland. one prefer says in order to change one part of the system you have to change another. so the question is reforming medicare, and mr. reichaur we need to change prices.
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i'm on medicare. it is not a great system. so my question i'm putting out to all of you in united healthcare, you're aarp. you're one of the largest insurance companies and you have supplements to part b. you need cheek attitude. not just for me. at it down the road. the younger people. if you're talking about fee for service -- i want to pick it, my doc, i like competition but you haven't addressed the major part of health care reform, which is the patient-doctor relationship, the issue of deductibles, and the amount that it's gone up, and the issue of possible malpractice if a patient knows enough and says, i don't want this test but the doc has to cover themselves because if they don't they're going to get sued, and that has never been part of this healthcare, medicare, or
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portable care act discussion, and i think it's very important. i have had to get malpractice insurance. so where are we with this? down the road, for folks who in time will get on medicare and it does need to change. thank you. >> well, there's a lot there. i think i'll address the medical liability portion of it. and invite my panelists to help me. i think you're right that medical liability needs to be reformed. it wasn't changed substantially in the healthcare law that passed in 2010. there's probably more of an opportunity now than there has been in the past, i think because -- in part because congressional budget office says it will save a little money. so they changed that, i don't know, three or four years ago. and so at some point along the way wouldn't surprise me that
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the policy might get published along just by virtue of the fact it could be idea to pay for some things in a political environment. not to say it will because of the political coalition that is against this is quite powerful, but seems to me there's more of a possibility now than in the past. if that's of any solace. >> let me address a little bit the patient-doctor relationship or the patient-doctor-doctor relationship, which is maybe just as important, more important. one of the criticisms of traditional medicare, it is an uncoordinated system. that's correct. and the coordination isn't just between patient and doctor. obviously the fee for service incentives can get in the way of that. but it's also the failure of traditional medicare to really provide structure incentives that encourage coordination
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across the continuum of care, doctor to doctor, doctor to hospital. medicare is not unique in this but medicare could take more of a leading role in trying to resolve a problem that's a very difficult issue. in the end, i think what we need is health plans, whether it's medicare or other plans, that focus on this and i think that's going to be driven by the inevitable pressures we're seeing, the financial pressures on he medical sector, and the growing awareness of younger people that they can be served better -- in fact the internet isn't such a bad thing. they find out things, sometimes it's right. but younger people, unlike my mother, younger people know that things could be better, and are willing to speak up.
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>> we have time for one final question, and the woman with her hand up right there. >> hi. my question comes directly from my affiliation as a foreign national with the uk government. along the lines of what we have been saying in terms of other systems, and with the -- the nhs being devotion to commissioning groups, and we mentioned joseph, how do you aline incentives with physicians, and how do you put more power into the hands across the board. and so they've done that in the uk by deinvolving the system to these groups and i wondered if any of you, particularly joseph, how that would work in practice in the united states. >> let me turn this over to bob. your issue was how to get
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physicians to be -- feel they're more in charge? well in some sense they are in charge. they're certainly in charge when i visit my doctor. i think the question really for me -- my answer is a financial question. that the financial relationships up the line cause some obscuring of what that relationship is. the doctor is really responding to two people. the patient, and in the payer, and so to some extent, i think the way to look at this, at least the way i look at it, is to work on the financial end of it. that's the end we can deal with. if you change the incentives, people will change the behavior, but it has to direct -- hard to directly change the behavior otherwise, i think. >> it involves partial
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capitation to the health groups, and i think everybody here would sign on to that, but, you know, worked better in california where there's a lot of multispecialty group practices and not so well in new jersey, which still has dr. welby, alive and well and dominating. >> right. i say you look at these new provider networks, as opposed to maybe a there divisional ma or fee for service when they're sharing in risk and they're sharing in responsibly managing the costs better. i think that's an encouraging trend. i agree with bob. in different parts of the country it will move more quickly. there's no doubt in this country we're seeing huge consolidation of our healthcare industry, and the physician community want to be part of that and are moving particularly on the sgr reform,
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the physician patient reform we're seeing before the come congress today. they're opening up the door to anything other than the old way. we'll accept if it with we don't have to do an annual foot over sgr physician payments, and so that actually has been an encouraging development that may lead to reforms in that direction. >> well, we have now come to the end of our session. let me just say a couple of things in conclusion. first of all, i have found that personally a very clarifying session. i think that there is agreement, and as far as i can tell a well-founded agreement, that the current fee for service system is defective in at least two respects. first of all, that it has put upward pressure on volume, which is not really very well compensated by the quality of outcomes, certainly not in proportion to the upward
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pressure. and secondly, it has helped to sustain beyond it useful lifetime a system of very individualized, noncoordinated care across different practices, different services, and that a system that creates incentives for greater integration would be a very good idea. so, it seems to me that the question, not just before the assembled company but before the congress and the country is, if this system is not effective and is not sustainable, then with what should we replace it? the fact that there's not total agreement to the answer to that question does not gainsay the fact we're coming to agree on the definition of the problem. that is more than half of the path to a solution. so thanks to the panel for making that clear and driving it
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home from different perspectives. different disciplinary perspectives and political perspectives. second, and finally, please join me in thanking our panelist for a superb hour and a half. [inaudible conversations] >> republican senator mike ray of utah spoke at the heritage foundation on monday about the conservative agenda. he was asked about proposed legislation that would allow states to collect sales taxes for online purchases. >> referring to the marketplace. i can't support that, and separate and apart from the fact i have a rule that -- any pete
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of legislation has the word fairness in it. protesting too much. so, i can't support that. there are several reasons for it. some of them technical, leak that there's an absence of any kind of preemption provision so you could continue to have states who are trying to expand their own reach as far as the nexus retirement contemplated under north dakota v. quill. and there's nothing to preempt out state action that could extend this reach even further. at a broader level, i worry about federal legislation that allows states to make tax collection agents out of state businesses that have not purposely availed themselves of the benefit of doing business in the taxing jurisdiction. and, therefore, have no ability no direct ability, as a
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constituent, to have input on the legislative decisions of that state. as for why there's such an eclectic and broad support base for it, i don't know exactly what to make of it. i do understand many of the concerns animating it. i have people in my home state of utah who support it, including several of our best state legislators who have been strongly behind this piece of legislation, and i certainly don't want to disparage them or their good intentions bit i just can't support it. now, as far as how broad the support base will be, it's difficult to say. there was fairly overwhelming support -- i can't remember the exact vote count but when he had a resolution on this in connection with the budget resolution, the number of senators voting for that, for this sort of proxy resolution -- proxy amendment to the budget resolution, was in the mid-70s. it remains to be seen whether
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there will be that degree of support. >> in a few moments a senate judiciary hearing on an immigration plan being proposed by a bipartisan group of senators in four hours some of today's senate debate on a bill that would allow states to collect sales taxes from online retailers. after that, treasury secretary jack ruth testifies on capitol hill about the president's 2014 budget request. >> coming up on the next washington journal, discuss the legal definition and history of the term enemy come -- combatant. and then the military court-martial system is analyzed. washington journal is live at 7:00 a.m. eastern on c-span.
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>> the museum is meant to help a visitor relive the first eighta@ >> i don't know if there's a lesson there i do know that went in a different direction with the -- apart from the museum, with the component of the programs from which the programs will emerge. >> watch the dedication ceremony of the george w. bush presidential library and museum from southern methodist university in dallas, live, thursday morning, on c-span 3, c-span radio, and c-span.org,
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and tune in earlier at 6:20 a.m. eastern on c-span for a conversation with the former first couple. >> now a judiciary committee hearing on the immigration plan being proposed bay bipartisan group of senators, referred to as the gang of eight. the bill unveiled last week is supported by the white house and a variety of groups, including the afl/cio. this portion of the hearing is about four hours. >> we'll ensure we're not back in the hearing room 30 grimes now to revisit the issue. will the small business and u.s.-based companies be able to compete and find high-skilled workers to grow the economy? will american workers truly come first? will we incentivize people to come here and overstaying their visas? these are questions i have. put in regard to border
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security, security is what is the basis of the sovereignty of any nation. we have independent authority over our -- we must have independent authority over our borders. thank you, mr. chairman. >> thank you very much. we'll hear first from our arturo rodriguez. served as the president of the united farmworkers since 1993. he spent much of his life working to establish fair working conditions for work north america the western united states. no stranger to this committee, and of course, senator feinstein has worked hard on the agricultural matters has met and talked to you a great deal, and please, mr. rodriguez, go ahead. >> mr. chairman, i ask the senator cornyn we given five minutes bass he wasn't here friday and he is the ranking republican on the subcommittee. >> could i ask it be taken --
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secretary napolitano was scheduled to appear then but i think everybody understands what happened in massachusetts, she could not be here. she will be before the committee tomorrow morning. today's hearing is our fifth immigration hearing this year. it will add to theern 40 hearings chaired during the last two conditions on this matters. on friday we received testimony about the impact, economic impact of the bill. today we hear about how the bill impacts our farming, construction, service, and technology industries. we're heal the views of those on immigration reform and those who oppose the proposal. we'll hear from the religious community and the business community. hear from scholars, law enforcement advocates, witnesses
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who believe the equality for all under an immigration system is not only right but in our nation's interests. long past time to reform our immigration system. we came close in 2006 when senator kennedy and senator mccain led a bipartisan effort in the course of those efforts, senator kennedy said the following... we believe that immigrants like women and african-americans before them have rights in this country. the time is right for a new civil rights movement. we believe that the nation of immigrants rejects its history, its heritage, when millions of citizens are confined to arc second class system and all americans are debased by such a two tier system. item has come for comprehensive immigration reform. my dear friend senator kennedy was right. i wish the house had joined our quest in 2006 and we completed
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the reforms back then. i am glad, however, that senator mccain has once again joined this effort. it's long past time to get this done. we need an immigration system that lives up to american values, helps write the next chapter in american history by reinvigorating our economy and enriching our communities, the kind of country that attracted my maternal grandparents here, or my wife's parents, when they came here and became citizens and productive citizens. and in vermont, immigration has proposed cultural richness, and refugees, economic development, the regional center program, and tourism and trade with our friends in canada. for an agricultural worker support, vermont's farmers and growersers and many have become part of the farm family and are
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such an integrate part of the fabric of vermont communities. among today's witnesses are two vermonters who talk about the needs of farmersing are the challenges many face under the current system, and the way international tourism and trade is critical to border states like vermont. now, let me point out one thing that has troubled me a great deal. last week opponents of comprehensive immigration reform began to exploit the boston marathon bombing. i'm a new englander. i spent a lot of time in boston, greg -- growing up, and so do today. friends and relatives there. i urge restraint in that regard. refugees and asigh him seekers have enriched this country, and in vermont we welcome as neighbors somalis and just as other states have welcomed immigrants to america, whether
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it's the hmong in minnesota, vietnamese in california, cuban americans in florida, new jersey,. our history is full of these stories of salvation. no-no one be so cruel as to try to use the heinous acts of these two young men last week to derail the dreams and futures of millions of hard-working people. the bill before us would serve to strengthen national security by allowing us to focus our border security and enforcement efforts against those who do us harm, but a nation as strong as ours, can welcome the opressed and persecuted without making compromises in our security. we are capable of vigilance in our pursuit of these value and we have seen tremendous work that the local law enforcement as well as the federal law enforcement have done in the boston area, and i am so proud of them. the bipartisan effort behind the
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proposal we're examining today is the result of significant work and compromise. in addition to the eight bipartisan members who led the effort, i also want to thank senator feinstein and hatch for their work on the provisions affecting agriculture. so i urge everyone on both sides, consider their example as we move forward on this, too often in the recent past this committee has broken along partisan lines on compelling issues elm we saw all the republican senators on this committee oppose reauthorization of the violence against women act. fortunately, with the house of nearly half of the republicans in the senate, and a great number of republicans in the house, were able to enact that important legislation this year. now, we had three committee hearings and for markups and extensive negotiations on gun laws but we saw republicans of
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the committee oppose bipartisan efforts to close the gun show loopholes and enact a tough law against gun trafficking and straw purchasing. let's not let comprehensive innings reform fall victim to what we saw of the violence against women act and guns. the challenge now is ours in the committee, but the challenge is really for all of america. let this committee set an example and bring to the senate what should be the cop sense -- conscience of the nation, to build a system worthy of american values. senator grassley. >> if you want to avoid partisanship, i'd say let's been very deliberate and you have been deliberate so far. and if you consider that i don't think you'll have any partisanship. and i want you to take note of the fact that when you proposed
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gun legislation i didn't accuse you of using the norris town killings as an excuse. and i don't hear any criticism of people when there's 14 people killed in west, texas, and demanding -- taking advantage of that tragedy to warn about more government action to make sure that fertilizer factories are safe. i think we're taking advantage of an opportunity when, once in 25 years, we deal with immigration to make sure that every base is covered. today we continue our discussion on the immigration bill that was unveiled last wednesday. and very good work by a bipartisan group of senators. and as they correctly stated, a starting point, and a process
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that's going to be -- have to be very deliberative. because we were very deliberative in 1986, and we screwed up because at that point we only had three people crossing the border unlawfully. now there's 12 million people that have. as some of the authors of that bill have emphasized, the border security and economic opportunity and immigration modernization act is a starting point. now, there are 92 other senators that must get their chance to amend and improve this bill in a deliberative process. let me begin by saying that a critical part of the bill that we're discussing is the first 59 pages. and as people read through this bill, i hope you'll pay special attention to those 59 pages. this is the border security section that triggers the kickoff of legalization.
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because if we don't secure our borders up front, there will be no political will and pressure from legalization advocates to too it later. to summarize, the bill requires the secretary of homeland security, within six months that a bill is signed into law, to submit a comprehensive southern border security strategy as well as a southern border security fencing strategy. after those so-called plans are submitted to congress, the secretary can start processing applications to legalize the 12 million people in the united states. the result is that the undocumented become legal, after a mere plan is submitted, despite the potential that the plan could be flawed and inadequate. additionally the bill provides
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6-1/2 billion in emergency spending to be available for various border security enhancements to be used under the discretion of the secretary. i understand the need for such an investment. there's no congressional input on either the secretary's plan and the funding that she will have at her disposal. i have not read every page in this bill yet, but from what i read i find a great deal of congressional authority delegated to the secretary. it reminds me of the 1,693 delegations of authority in the healthcare reform bill that makes it almost impossible for the average citizen to under understand what might be coming down the road. more importantly, the bill does nothing to improve the metrics that this and the future administration will use to ensure that that the border is truly secure. congress passed a law in 2007
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requiring that the 100% or the border be 100% quote-unquote operationally controlled. however, president obama and secretary napolitano abandoned that metrix. the bill before is weakenes current law by only requiring the southern border to be 90% effectively secured. in some sector, only the so-called high risk sectors. what about the other six sectors? then before green card are allocated to those here illegally, the secretary only has to certify that the security plans and fencings are quote-unquote substantially deployed. operational. and completed. if the secretary doesn't do her job, then a commission is created to provide recommendations. this is just a loophole that allows the secretary to neglect doing the job. another area of interest for me
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is the employment verification measure. as i said before so many times, i was here in 1986 when we for the first time made it illegal for employers to hire undocumented individuals. i've been a champion for making the everify system a statement in eave work place. it's a proven and valuable tool to ensure we have legal work force. wheel i'm encouraged the bill includes everify, i'm concerned it will render the program ineffective as an enforcement tool. the bill fails to put the system the place for everyone for almost six years china road. -- six years down the road. after regulations are purchased the biggest employers in the country will have another two years before they're required to check their employees. if we're legalizing and providing work permits in six months, why must we wait up to six years for everybody to my? the system is ready to be deployed right now nationwide.
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finally, on everify. the bill fails to require or even allow employers to verify their current work force and is only prospective in nature. i'm concerned about the secretary's ability to exclude individuals with, quote, casual, sporadic, irregular, or intermittent, unquote, employment, however they may dedefined. and then why we don't define those term is don't know eye. interested in hearing from the witnesses about whether the bill fixes the problem in our immigration system. everyone including myself says the system is broken. aside from legalization for those who are here and potentially for the family member whose are not, in the clearing of backlogs, what does the bill do to fix the system. what improvements will ensure we're not a back here in the hearing room 30 years from now to revisit the issue? will the new legal guest worker program be effective?
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will small business and u.s. based companies be able to compete and find high-skilled workers to grow the economy? will american workers truly come first? well we incentivize people to come here legally and deter them from overstaying their visas once it's expired? these are questions i have. but in regard to basic -- in regard to border security, security is what is the basis of the sovereignty of any nation. we have independent authority over our -- we must have independent authority over our borders. thank you, mr. chairman. >> thank you very much. we'll hear first from arturo rodriguez. served as the president of the united farmworkers 1993. spent much of his working life to establish rights for works, is no stranger to this committee, and of course senator
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feinstein has worked so hard on the agricultural matters i know has met and talked to you a great deal, and please, mr. rodriguez go ahead. >> mr. chairman -- >> mr. chairman -- i ask that senator cornyn we given five minutes because he wasn't here friday and he is the ranking republican on he subcommittee. >> could i ask if he takes that during his question time? i know you weren't here, and incidentally, stated publicly that if i was in your shoes i wouldn't have been here either. >> we had 14 dead -- >> i said publicly i would have been there -- >> the reason i was there and i understand and i appreciate the ranking member pointing out the reason for my absence. i my only concern, mr. chairman, that takes away time i have for questions for the panel. >> no. no. i'm going to give you an extra five minutes so you can do both. >> i'd be happy too. >> i did state, i did state publicly at the hearing that it
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commended you for being in texas, and that the place you had to be. >> me, too. >> okay, mr. rodriguez. >> as did senator feinstein. >> well, thank you, chairman leahy, ranking member grassley, and members of the subcommittee. thank you for the opportunity to testify today. my name is arturo rodriguez and i have had the honor of being the president of the united farmworkers of america. tomorrow will mark the 20th 20th year since our founder, cesar chavez, pass away so we think it's appropriate we're here today on this historic day to talk about the future of american agriculture. i wanted to give a special thank you to senators feinstein, who we worked with for years to solve this problem, and senator hatch. unfortunately couldn't be with us here today. with whom we have worked close can i with, especially over the last several months. that helped news forging this agreement and bringing together and dealing with the crisis that we face in american agriculture, and that we'll hopefully -- this
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will be able to provide some stability in the years to come. last week, both chuck conor to my left, and i probably joined other agricultural employers and agricultural workers in supporting a policy proposal put together by senator feinstein, hatch, ben net, and rubio, that will stringen -- strengthen our nation's agricultural industry. it is part of the comprehensive immigration policy submitted by senators schumer, mccain, durbin, graham, men anybody dez, flake, and rubio. it's great to see so men of you on this committee today. thankfully many of you are very committed to fixing our broken immigration system. someone born in and raised in texas and almost all of my extended family in texas, i am proud that both texas senators are on this committee, and i hope to leave here today knowing i can count of the support of senators cornyn and cruz to
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advance this proposal, in addition to those who we have worked so hard with. both farmers and farm workers have worked together over the last five months with the support of these senators, from both political parties in representing very different regions of the country in the interests of improving our agricultural industry and securing our nation's food supply. we have worked so hard to come together and we ask you as members of this committee to come together to support this proposal because america's farms and ranks produce an incredible bounty that is the envy of the world. the farmers and farmworkers that make up our nation's agricultural industry are truly heroic in their willingness to work hard on take on risks as they plant and harvest the food all of us eat every day. both our immigration system -- but our immigration system threatens or nation's food
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supply. our nation'lling a cultural employers have been at odds on policy issues women have now come together to unify our agricultural industry. we are in a unique moment in our nation's history, and together with a lot of work, you on this committee can make the changes we need to secure our nation's food supply. let me speak a little about what is at stake for the women and men who work in the fields. every day across america, about two million women, men, and even children, labor on their nation's farms and ranches, producing fruits and vegetables and carrying for livestock. 600,000 of these are u.s. citizens or permanent legal residents. our migrant and seasonal farmworkers are rarely recognized for bringing this rich bounty to supermarkets and our dinner tables, and most americans cannot comprehend the difficult struggles faced every day by form worker families,
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increasingly, america's consumers are asking government and the food industry for assurances that their food is safe, healthy, and produced under fair conditions. flrn the life of a farm worker in 2013 is not an easy one. most farmworkers earn very low wages. housing is often poor and overcrowded. federal and state laws exclude farmworkers from many labor protections other workers enjoy, such as the right to join a union without being fired for it. overtime pay, many of the osha safety standards, and even workers compensation in some states. farm work exclusion from these basic federal laws in the 1930s is one of the sadder chapters of our history. with any new immigration policy, first and foremost we seek an end to the status quo of poverty and abuse. we should not continue to treat farmers and -- farmworkers as
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second class workers. we also know any new immigration policy must consider the future of the work force upon which american agriculture depends. i want to thank this committee very much for the opportunity to be here today and certainly answer any questions the committee might have in regard to this. thank you very much. >> thank you very minute, mr. rodriguez. our next witness, charles conner, served as the president's ceo of the national council farmer cooperatives in 2009. serve as deputy secretary and acting secretary for the u.s. department of agriculture and in the bush administration from 2005 to 2009. i might say on a personal note, during the time i was charm of the senate agricultural committee and ranking member, that mr. conner is one of the most valuable staff people working there, relied on heavily by both republicans and democrats for his advice. go ahead, mr. conner.
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>> chairman leahy, thank you for those comments. ranking member grassley and members of the committeeee, thank you for the invitation to testify on agricultural, american agriculture's need for immigration reform. as noted in your introduction i ham chuck conner, president and ceo o the national council of farmer co-ops and also here as one thereof founding members of the agricultural work force coalition or the awc. it prinze together nearly 70 agricultural organizations that represent the diverse needs of agricultural employers across the country. the awc came together because increasingly finding enough workers to pick crops and care for animals has become the number one priority for many of our members across the country and all regions of the country. i dare say that for many producers, this immigration legislation and this debate before us is more important to the survival of their operations than any other legislation
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pending before congress. we have all seen reports of crops, left to rot in the fields because growers lack firefighter workers to bring in the harvest. it's estimated in california alone, some 80,000 acres of fresh fruits and vegetable production has been moved overseas because of labor shortages here in the u.s. the problem extends to animal agriculture as well, especially dairy. a stewedy by texas a&m found that farms using immigrant labor supplies on more than 60% of our farms in this country producing milk. without these employees, economic output from this study was estimated to climb by nearly $22 billion and 133,000 workers would have lost their jobs. as many of you know the formation of the awc represents a significant change from where we have been in the past. for many years, american agriculture has spoken with many
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and often times conflicting voices on the issue of immigration. today, as the awc, we speak with one unified voice. this unity in agriculture extended beyond just the employer side, though. the awc has also engaged the united farmworkers union in arriving at landmark agreement on agricultural immigration reform. it's a great pleasure that my fellow panelist today, arturo rodriguez, profit the ufw, joins news support of this legislation. i would also like to emphasize that reaching this agreement would have been simply impossible without the leadership, tenacity and commitment of senator dianne feinstein. senator feinstein joined in the process, of course, by senators marco rubio, senator bennet and senator hatch, fostered a spirit of unity necessary to produce this agreement. the agricultural provisions
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represent our best chance in over a decade or longer to solve the labor shortage in agriculture. the program outlined in the bill includes two key components, blue card program with both current experienced farm workers and a new visa program to meet future labor needs. ...
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a new flexible and mark-based agriculture worker visa program. more importantly it will be administrated by the u.s. department of agricultural. this is the significant change from the current regime administrated by the department of labor, which is demonstrated a complete lack of understanding of agricultural and our labor needs. additional information on agricultural unique labor needs as well as the details of the proposal can be found, of course, in my lengthy written statement which was submitted for the record, mr. chairman. i thank you again for the opportunity to testify on behalf of so many in agricultural today. i look forward to any questions you have at the later time. >> thank you. it's good to see you back here on the hill. alyson eastman is the president associate an agent of a2a business services from employer of agricultural workers based in vermont. her family is long tradition of farming in vermont and currently
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own a 278-acre farm in vermont. it's one of the prettiest parts of vermont. one of the most significant agricultural parts of our state. mrs. eastman, go ahead. >> good morning. we have been assisting employers since 1993. first i would like to thank chairman leahy, ranking member grassley, and all members of the committee for providing me the opportunity to appear before you today. on behalf of the ag employers that i represent in vermont, new hampshire, and new york as an agent. as a member of the national counsel ag employers and my work i traveled to d.c. on several occasions including two bipartisan meets with the u.s. dol officials and members of congress. there is a bipartisan agreement that the current system is broke
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and that the program is a stands steady nearly impossible use. a shared challenge faced by all farmers seems to be finding legal and experienced labor to provide the agricultural employer with confident, predict, and stability. property posed bill would be useful as it no longer draws a distinction between the seasonal and nonseasonal employers such as dollar ray farmers. it will allowdaughter -- a common misconception is that seasonal guest workers displacing u.s. domestic workers. in our office we not only facility the application paperwork for employers but in some cases we also process their payroll. there's a direct correlation between the hiring of h2a and the hiring of domestic employees. in 2012 applied in pee -- pee tegsed. the majorly roughly 200 worked
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for an eight-week harvest period. they created fifty year-around domestic jobs. their payroll for fiscal year ending was short of $2.4 million. without the workers, employers would not find it possible to harvest the crops quality to the quality method and therefore not have a marketable crop. all employers will tell you that it requires appropriate timing and skilled lay tabor pick produce in a way that ensure a quality product in market opportunity. employers face many challenges with the current process. and majority of the issues because u.s. dol does not understand ag. the application process is time sensitive timing at sixty dases. it's nearly impossible to get them here in a timely fashion. these employers are in the program because they want to legal, reliable, and experienced
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work force. it would be mosted a venn teenage facility the process as they understand the needs of agricultural. i think back to august of 2010 when there was no movement of the workers because department of state notified by u.s. dol not to let any of the jamaican workers enter the country. thankfully senator leahy seized action and agreement reached within an week and each employed signed an avid they would not take any dededuction. we would seen them on the ground as a total crop loss. our office didn't get any sleep knowing that crop insurance would not cover the type of loss. it's important employers such as barney and sunrise he continue to get the experienced workers back each year. he said without the experience
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workers my orchard would be gripped and down farming. the only account i see the w2 and w3 visa since all employee annual wages are reported on a form w3 and the gross employer wages are reported on form w3. the pros outweigh the cons. also the logic behind the proposed wage rate seems more common sense and affordable. i believe the undocumented workers follow much of what is said above. i would be -- it would be great opportunity for the employers to obtain a legal work force and
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provide them with stability. the public doesn't seem to understand that the undocumented workers have been paying to social security and medicare with the expectations that they would never benefit if from it. steams ludicrous to consider sending automatic of the undocumented workers home as significantly impact our social security and medicare funding. while at the same time losing those folks who support our farms by doing jobs that americans don't want to do. no doubt whether one is referring to an undocumented worker they share the following in common. these workers are ambitious. here to work, they want to please the employer and improve their rotten life and willing to do jobs that we cannot get americans to do. let's not forget through doing the jobs that americans don't want to do they create jobs on the farm for the u.s. domestic workers. i conclude by stating a solid immigration bill will solidify and solve many of the ag issues that employers are facing
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today. thank you for providing me with the opportunity to testify. i look forward to answering any questions. thank you. thank you for using those real world examples. i remember very well the question with the apple pickers. thank you for complimenting they do -- they're the ones doing the work. i know, a lot of meetings and phone calls with you and others and number of -- they did leg work and i worry about the crops too. it's a significant part of our basis. the h2, a program is open to everyone prayer and seasonal employers. we take care of apple pickers but then we have dairy farmers
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and senator franken and i noted that you can't tell the cows belle back in six months to milk you again. they don't react well to that. and so how would the proposed agricultural work visa legislation help seasonal and year-around workers? >> sir, i think it would definitely help in many ways. allowing for the workers not only be here around year, milk the cows. i think when you face both visa whether they come for one employer or the ability to move between employers. all of that seems veried a venn teenage use and take care of dairy farmers. when i look how the h2a works today and i see that poultry, some of the farms are year-around they have the
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ability to get h2a seasonal workers only because it's seasonal work they're doing. however the milking of the cows does not weigh. >> we -- we see a lot of dysfunction in the current program. do you think we should be giving the department of agricultural a greater role in the visa program. >> absolutely. i think most agree on that. i have a prime example of u.s. department of labor i think everybody can understand. when we petitioned for eighteen feed seasonal workers to come and process turkey the job employment period was from 10/13 it was clear they were coming for thanks giving. we received a notice of deficiency. they wanted to know who was doing the jobs when the seasonal workers weren't here. we had to respond and show two years worth of payroll and have it notarized an avid saying it was true to prove they were needed here to process turkeys
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for thanksgiving. i'm not sure what is on the table at thanksgiving. they didn't understand that need. [laughter] another -- . >> no i understand. i know, you have a couple of other examples. i want to ask mr. rodriguez my own time here. i know, how he was one of the chief negotiators in the discussion over the agricultural side. i would note again everybody has been involved had to give -- people realize the committee has been giving on both sides. the -- one area, though, on this legislation -- can you tell us how it's going to help prevent the exploitation of undocumented farmworkers? >> well, first of all, i don't want to thank the worked with
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and senate feinstein and the rest of the senators with us. they helped fashion the discussions in such a way we talked about the various issues that affected all of us. i think all of us in the end, senator leahy wanted to make sure we an agricultural that was viable and respect and be proud of in our nation. it was important for us to establish an agreement here that would honor the farmworkers and the work they do as well as ensure that the ag industry will have the supply of labor that is necessary, the skilled professional farmworkers they need to harvest their crop and the dairy industry and other industries. and so, you know, we feel that there are a lot of protections that are here in the legislation that will ensure the protection of the existing farm work labor force here now. the current force have a opportunity legalize themselves
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via the blue cart program. that will provide great opportunity for stablizing their family, stablizing the industry, stablizing the agricultural economy within our nation and providing a good product for american consumers. >> and living conditions. >> certainly the living conditions would be very important and, again, we work very closely in discussions with the agricultural industry. they were very open to ensuring that that did exist here within the legislation. thank you. i know, you worked with a number of people with the lead negotiators on your side. i know, it's a lot of give and take with senator feinstein and hatch. we get the reports. you feel pretty satisfied it's going to be not only better for the country but better for agricultural. >> senator leahy, there's no question. let me underscore it's a
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comprise piece of legislation from our standpoint, you know, the negotiations were extremely difficult, but in the final product, we believe we are a balanced proposal that protects the farm workers interest as arkansas arturo described. provide what it does best is produce high quality, hoff low cost product we're not continuing to import more and more of the food supply which is what we are strongly against. >> thank you. >> there's no question. it's the right balance. we believe it provides a set opportunity because of the legalized work force through the program through the existing trained skilled workers. but to equally as important from the new guest worker program that contains both an at will as well as a contract provision so that the seasonal as well as the livestock industry can get the workers they need in the future. >> i thank you and yie